O'Reilly logo

Trading Tools and Tactics: Reading the Mind of the Market by Greg Capra

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 14

Manage the Trade and the Money

The Missing Link

As you grow as a trader, you become more accustomed to technical analysis and how price action works in a predictable manner. You gain confidence in reading charts and see plays move in the direction that you desire them to move. Understanding all of the workings of price action takes some education and experience but it is all at a level that can be learned by anybody. Naturally, the quality of your teacher and the quality of the education makes all the difference as to how well you learn to read charts.

After gaining the proper chart reading experience, the next hurdle in good trading is management; how to translate a price movement on a chart into having the money end up in your bank account. The first big topic in trade management is how to manage the money and there are a few different levels to this which we will go over in this chapter. If you lose large amounts of money on your losing trades, and only make small amounts of money on your winning trades, it will be difficult to be a successful trader. Next comes the ability to manage the trade. Here we also have several possible levels through which traders develop. The overall goal is to capture large price movements when they occur, yet not give up significant gains when your plays have already had their maximum move. There is admittedly some art to this as there is to all of trading. However, there are very manageable rules to guide you through it.

MANAGING THE ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required